Glimco v. CIR, No. 16469.

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtCASTLE, , and SCHNACKENBERG and CUMMINGS, Circuit
Citation397 F.2d 537
PartiesJoseph P. GLIMCO and Lena Glimco, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Docket NumberNo. 16469.
Decision Date09 December 1968

397 F.2d 537 (1968)

Joseph P. GLIMCO and Lena Glimco, Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.

No. 16469.

United States Court of Appeals Seventh Circuit.

June 19, 1968.

Rehearing Denied July 9, 1968.

Certiorari Denied December 9, 1968.


397 F.2d 538

Edward J. Calihan, Jr., Chicago, Ill., for petitioners-appellants.

Mitchell Rogovin, Asst. Atty. Gen., Lee A. Jackson, Richard C. Pugh, Harry Baum, Louis M. Kauder, Attys., U. S. Dept. of Justice, Tax Div., Washington, D. C., for respondent-appellee.

Before CASTLE, Chief Judge, and SCHNACKENBERG and CUMMINGS, Circuit Judges.

Certiorari Denied December 9, 1968. See 89 S.Ct. 452.

CUMMINGS, Circuit Judge.

In the Tax Court, Joseph P. Glimco ("Taxpayer") filed a petition for a redetermination of deficiencies asserted by the Commissioner of Internal Revenue for the taxable years 1954 through 1957.1 On the three issues involved here, the Tax Court decided in favor of the Commissioner. Those issues are (1) do the legal fees and expenses, totaling approximately $125,000, paid by Teamsters Local 777 to defendant Taxpayer in a Hobbs Act prosecution, constitute income to Taxpayer or are they deductible as ordinary and necessary business expenses; (2) whether his cost basis for real property at 1215 North Oak Park Avenue, Oak Park, Illinois, was overstated; and (3) whether certain dividends were taxable to him or his children.

Deductibility of Legal Fees

Between June 1937 and January 1939, Taxpayer was employed by Local 650, Poultry Handlers Union, as an organizer. From 1940 through the taxable years in question, he was employed by Local 777 of the Taxicab Drivers, Maintenance and Garage Helpers Union, with jurisdiction

397 F.2d 539
over the taxi drivers in Chicago. From 1950 to 1958, he was a trustee of Local 777 and was ex officio a member of Joint Teamsters Council No. 25, the policy-making organization for over 40 Teamster locals in the Chicago area

During the four taxable years, Taxpayer spent his mornings at the Chicago office of Local 777 and his afternoons at a restaurant in the poultry market area of Chicago. While at the poultry market, he was consulted constantly by various unions and employers concerning the conduct of the poultry market with respect to wages, hours and working conditions.

In October 1954, Taxpayer and four other individuals were indicted for violation of the Hobbs Act (18 U.S.C. § 1951). In the indictment Taxpayer was described as an agent and representative of Local 650 of the Chicago Poultry Handlers Union. No mention was made of Teamsters Local 777 or Joint Teamsters Council No. 25. He was charged with unlawfully collecting money from poultry merchants from 1944 to 1954 through "actual and threatened force, violence, and fear." Taxpayer pleaded not guilty to the indictment and was acquitted by a jury in March 1957.

The payment of Taxpayer's legal fees and expenses was authorized at an October 1954 meeting of the membership of Local 777, in part to combat press attacks being made upon Local 777.

The Assistant United States Attorney who prosecuted the Hobbs Act indictment against Taxpayer testified that the indictment concerned Taxpayer's interference with interstate commerce in the poultry market in Chicago, and that it was the Government's theory that Taxpayer's "position and influence in the Teamsters Union enabled him to dominate the transportation situation on the poultry market with regard to several locals specifying 703, 705, 710, 731, and 738, but not mentioning Local 777 that were involved in transportation * * *."

Taxpayer's counsel in the criminal case testified that the indictment stemmed from Taxpayer's activities as a labor leader on the poultry market, and that it extended beyond Taxpayer's position in Local 777.

In the Tax Court, the Taxpayer's primary contention was that the legal fees and expenses were a gift to him by Local 777. However, the Tax Court found that Local 777 did not have a donative intent but was trying to benefit itself by mitigating press attacks resulting from the indictment. The Taxpayer does not really attack this finding, for his brief admits "that the motivation of the union Local 777 in paying...

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23 practice notes
  • Peat Oil & Gas Assocs. v. Comm'r of Internal Revenue, Nos. 30296–87
    • United States
    • United States Tax Court
    • March 31, 1993
    ...T.C. Memo.1986–569; 7th Circuit: Burger v. Commissioner, 809 F.2d 355 (7th Cir.1987), affg. T.C. Memo.1985–523; Glimco v. Commissioner, 397 F.2d 537, 540 (7th Cir.1968), affg. T.C. Memo.1967–119; 8th Circuit: Evans v. Commissioner, 908 F.2d 369 (8th Cir.1990), revg. T.C. Memo.1988–468; 9th ......
  • Boggs v. Commissioner, Docket No. 6824-82.
    • United States
    • United States Tax Court
    • August 15, 1985
    ...(9th Cir. 1971); Fleischer v. Commissioner 68-2 USTC ¶ 9638, 403 F. 2d 403, 406 (2d Cir. 1968); Glimco v. Commissioner 68-2 USTC ¶ 9436, 397 F. 2d 537, 540-541 (7th Cir. 1968), affg. a Memorandum Opinion of this Court Dec. 28,483(M); Kean v. Commissioner Dec. 29,260, 51 T. C. 337, 343-344 (......
  • United States v. Kessler, Civ. No. 71-286.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • September 5, 1973
    ...dispute, or for any other purpose reflecting on the good faith of the particular investigation. 7 See, e. g., Glimco v. C. I. R., 397 F.2d 537 (C.A.7 1968), cert. den. 393 U.S. 981, 89 S.Ct. 452, 21 L.Ed.2d 442 (1968); Malat v. C. I. R., 302 F.2d 700 (C.A.9 1962), cert. den. 371 U.S. 934, 8......
  • Laurel Hill Cemetery Ass'n v. United States, No. 75-233C(A).
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • February 4, 1977
    ...motive which is the most important criterion for finding that a course of activity is a "trade or business." Glimco v. Commissioner, 397 F.2d 537, 540 (7th Cir. 1968), cert. denied, 393 U.S. 981, 89 S.Ct. 452, 21 L.Ed.2d 442 (1968); Lamont v. Commissioner, 339 F.2d 377, 380 (2nd Cir. In a r......
  • Request a trial to view additional results
23 cases
  • Boggs v. Commissioner, Docket No. 6824-82.
    • United States
    • United States Tax Court
    • August 15, 1985
    ...(9th Cir. 1971); Fleischer v. Commissioner 68-2 USTC ¶ 9638, 403 F. 2d 403, 406 (2d Cir. 1968); Glimco v. Commissioner 68-2 USTC ¶ 9436, 397 F. 2d 537, 540-541 (7th Cir. 1968), affg. a Memorandum Opinion of this Court Dec. 28,483(M); Kean v. Commissioner Dec. 29,260, 51 T. C. 337, 343-344 (......
  • Peat Oil & Gas Assocs. v. Comm'r of Internal Revenue, Nos. 30296–87
    • United States
    • United States Tax Court
    • March 31, 1993
    ...T.C. Memo.1986–569; 7th Circuit: Burger v. Commissioner, 809 F.2d 355 (7th Cir.1987), affg. T.C. Memo.1985–523; Glimco v. Commissioner, 397 F.2d 537, 540 (7th Cir.1968), affg. T.C. Memo.1967–119; 8th Circuit: Evans v. Commissioner, 908 F.2d 369 (8th Cir.1990), revg. T.C. Memo.1988–468; 9th ......
  • United States v. Kessler, Civ. No. 71-286.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • September 5, 1973
    ...dispute, or for any other purpose reflecting on the good faith of the particular investigation. 7 See, e. g., Glimco v. C. I. R., 397 F.2d 537 (C.A.7 1968), cert. den. 393 U.S. 981, 89 S.Ct. 452, 21 L.Ed.2d 442 (1968); Malat v. C. I. R., 302 F.2d 700 (C.A.9 1962), cert. den. 371 U.S. 934, 8......
  • Laurel Hill Cemetery Ass'n v. United States, No. 75-233C(A).
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • February 4, 1977
    ...which is the most important criterion for finding that a course of activity is a "trade or business." Glimco v. Commissioner, 397 F.2d 537, 540 (7th Cir. 1968), cert. denied, 393 U.S. 981, 89 S.Ct. 452, 21 L.Ed.2d 442 (1968); Lamont v. Commissioner, 339 F.2d 377, 380 (2nd Cir. In ......
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